Report: Disconnect between marketers and consumers

New report also finds nearly than half of Aussie marketers aren't regularly measuring their marketing return on investment

Despite marketers needing to become more data-driven, targeted, and analytical to prove their worth, a new report shows a significant disconnect between what Australian marketers are actually doing and what they should be doing.

According to the 2018 Salmat Marketing Report, only 58 per cent of Australian marketers are regularly measuring their ROI, and many are investing in the wrong channels to reach customers. Added to this, only 45 per cent will test different channels and select the best performing ones before investing.

The report states of the four top channels marketers used in the last 12 months, only one appeared in the top four channels consumers use when making purchasing decisions.

The four top channels marketers used were the brand’s website (50 per cent), social media (47 per cent), email marketing (46 per cent) and online display advertising (35 per cent). In contrast, consumers relied on referrals and recommendations from trusted friends and family to make purchasing decisions (72 per cent), followed by search engines (48 per cent) and a brand’s website (35 per cent).

The reports found marketers are investing heavily in social media (47 per cent), which has less influence on consumer purchasing decisions, and are under-investing in SEO (28 per cent). Further, two in five consumers said online reviews influences their purchase decisions, and when shopping in-store over one third (37 per cent) of consumers say they often go online to check consumer reviews about a product before buying.

“There is a clear disconnect between what channels marketers think consumers are engaging with, and what consumers are actually using,” said Salmat head of sales and marketing, Andrew Lane.

“Social media is a powerful tool for driving awareness and interest and is also very powerful in the loyalty and advocacy space. However, it does not appear to have as much direct influence on consumer purchase decisions compared to other channels."

In good news, it seems marketing budgets are increasing, however, 38 per cent of marketers still report lack of budget as their biggest challenge. Almost one in five will increase their budgets ‘significantly’ in 2018 and a further 44 per cent will increase budgets ‘a little.’

Another key finding is brand choice and price sensitivity has eroded brand loyalty, with two in five consumers stating they do not consider brands when shopping, with 65 per cent saying they would switch brands if a product is either on sale, or if they would receive an incentive for purchasing.

Free trials, samples and discounts are also highly influential on purchase consideration, with 48 per cent of consumers saying it’s important or very important for a brand to provide these incentives to maintain loyalty to a brand, and 60 per cent saying it’s important or very important to give discounts to returning customers.

“Advocacy is an important influence on consumers, yet marketers are finding it increasingly challenging to create customer loyalty,” Lane said.

“However, our research shows that consumers are still willing to advocate for brands, with respondents almost three times more likely to write a positive review than a negative one. With this in mind, it’s important for marketers to embrace reviews, especially as new players like Amazon enter our local market.

“Overall, marketers need a better understanding of the key marketing principles in order to reach potential new customers, re-engage prior customers to grow brand loyalty, and understand what channels to invest their budgets into to garner the strongest return on investment.". 

Other findings:

  • Price is the most important influencing factor on purchasing decisions (83 per cent), followed by quality of product (67 per cent) and free shipping (56 per cent). When it comes to maintaining customers’ brand loyalty, 85 per cent of consumers expect brands to offer good value for money and competitive pricing.
  • Half of consumers (49 per cent) prefer to purchase in-store compared to 32 per cent online.
  • On average, marketers will spend 41 per cent of their budgets online in 2018. The top channels that marketers will look to invest or use for the first time in 2018 are social media (15 per cent), email marketing (14 per cent), and SEM and mobile / SMS (13 per cent each).
  • 69 per cent of marketers are unable to name all of the 4 P's of marketing (price, product, place, promotion).

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